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TIMESTAMPS

Pervasive Computing in a Networked World

Abstract

Almost everyone has heard of net-connected soft drink vending machines, but
how will we reach the dream of pervasive computing -- a billion people
interacting with a million businesses online via a zillion intelligent,
interconnected devices?

This paper examines the market environments, emerging technologies, and
scenarios for networked applications enabled by pervasive computing,
environments created when computing power and network connectivity are embedded
in virtually every device humans use.

These developments affect more and more of the world's population as we move
towards an increasingly networked world. This paper (1) examines these issues
and developments to date, with a particular focus on services geared to the
Asia-Pacific marketplaces; (2) discusses the social and cultural factors
affecting technology adoption in two major markets -- Japan and the United
States; and (3) looks at an early "pervasive" service in Japan.

Contents

1.1 Technology is moving from personal computers (PCs) to handheld,
intelligent, and everyday devices with imbedded technology and
connectivity

Pervasive computing provides convenient access to relevant information and
applications through a new class of ubiquitous, intelligent appliances that
have the ability to easily function when and where needed. The name
pervasive computing tells only part of the story; a parallel revolution
lies in network-enabling these pervasive computing devices by providing
transparent, ubiquitous access to e-business services. At last year's
international Telecom 99 conference in Geneva, the global telecommunications
carrier industry focused on the "information" industry. Concepts such as
"wireless Internet" were hot. However, even the mighty telco carriers need
partners in order to cover the breadth of disciplines necessary to provide
pervasive computing services successfully.

The long-promised paradigm shift of convergence may finally be
occurring. Virtually all types of information technology companies are
targeting the same area: hardware (PCs, Palm, and other personal organizers;
routers, switches, and consumer electronics); software (operating systems,
application, middleware, and network management); Internet, telcos, wireless,
and other service providers; consultants, system integrators, and networking;
along with broadcasters, cable TV, and content providers. Thus, cross-industry
partnerships and other linkages combining respective expertise are becoming
quite commonplace. But pervasive computing is a bit of a Rorschach ink blot --
different viewers see different subjective opportunities in this emerging
market space.

Our employer, IBM, along with other total solution providers, is focusing on
building some of the necessary technologies: imbedded software (Java), speech
technology, low power management, network administration, subscription
management, content transcoding (e.g., from HTML to Wireless Application
Protocol [WAP]), backwards compatibility, wireless transmission, and security,
(e.g., for equity trading). We are building an in-network Service Delivery
Platform (SDP), which connects existing content (e.g., a financial institution
such as a stock brokerage) to end-user devices, and provides security,
transcoding, and user management. This SDP also enables service provision,
acting as a Pervasive Services Utility (PSU). Accompanying the SDP/PSU is a
client that enables easy connection. To deploy services, we are collaborating
with carriers, telecommunication equipment manufacturers, automobile/device
manufacturers, financial services companies, and enterprise application
vendors.

A major requirement is integrating all this technology to deliver real
solutions to users. For example, banks and securities brokerages want to
link existing financial trading systems to wireless networks. The same holds
true for the travel industry and their reservations systems, not only for the
convenience of directly reaching their customers, but for added real-time
functionality -- for example, sending a message to a passenger that a flight is
delayed, and listing three alternative travel options. Or in health care for
enabling immediate access to patients medical records. Telematics and the
"network vehicle" promise network-connected clients in cars, not only for
driver navigation and communication, but for connecting the vehicle to the
manufacturer and maintenance/service providers. Such networked services enable
new relationships between these providers and their customers.

The Web has proven its value to business by linking various players.
Pervasive computing promises even more interaction among players, such as

Towards the end of 1999, many news articles appeared about appliance firms
planning to link their products to the Internet for maintenance, product
orders, and upgrades. As the new year began, announcements of strategic
alliances between appliance manufacturers and technology companies brought
these plans closer to reality. Announcements included the following:

An exercise machine maker that plans to equip its products with free Web
service -- so that a technologically oriented lifestyle needn't be sedentary
(Nettles Communications Inc., 1/21).

All of these reports add to the promise of pervasive computing and its
revolutionary possibilities as the Web's connectivity spreads globally.

1.4 Standards issues

The lack of established standards continues to pose problems, and battles
are emerging similar to those that occurred between Betamax and VHS in the
home-video industry. Producers of competing software enabling different
Internet appliances to talk to each other are making their case with appliance
manufacturers. At a January builder's show, GE and Maytag announced they would
join Microsoft Corp. in developing technology solutions and standards for
so-called smart appliances by joining the Universal Plug and Play Forum (UPnP),
a cross-industry group of more than 65 companies, including Sony, IBM, and
Intel. But GE also has a similar agreement to use Sun's Java and Jini
technology. In addition to its deals with Sears and GE, Sun has agreements with
Whirlpool, Bosch Siemens, Motorola, and Cisco. Sears has announced several
nonexclusive agreements. At this time, a dominant standard is elusive.

1.5 "Dick Tracy" wrist devices

As in real estate where "location, location, location" is key, the wrist is
seen by some as the most accessible place on the body. Thus, companies promise
consumer wrist devices that have function lists as long as your arm -- doubling
as cell phones, pagers, e-mail readers, computers, cameras, MP3 music players,
television receivers, voice recorders, automobile security keys, VCR remote
controls, health monitors, weather stations, compasses, Global Positioning
System monitors, altimeters, and games. With an active transponder, some can
function as admission passes for ski lifts and museums. And, almost as an
afterthought, they tell time (Motorola, Samsung, Timex, Seiko-Epson, Casio,
others, 1/20)

Worldwide, the United States is the leading market in terms of e-commerce
adoption, judging by transactions using 800 toll-free telephone, direct
marketing, and e-business Web sites, but Japan is ahead with devices and
ubiquitous connectivity networks supporting emerging applications. The growth
in e-commerce is lagging in Japan because of a cultural preference for
face-to-face transactions, especially in the business-to-consumer market
space.

2.1 Does this disparity imply two different futures for pervasive
computing or, due to cultural differences, merely divergent paths leading to
common networked applications ?

First of all, we need to examine the drivers of pervasive computing. An
important fact is that people generally do not adopt new technology merely
because of its novelty. Although there is a small group of users who are
constantly looking for the latest gadget to satisfy their interest in leading
edge technology and to stay ahead of the general public, these users do not
create critical mass. Years ago, some early adopters were willing to pay $5 a
minute for cellular phone services. Note that the Internet was already
available to academic researchers long before the Web arrived. However, what
wove those services into our daily life was not the technology itself but the
convenience it brought. Convenience varies from place to place, and
occasion to occasion. Taking less than a minute to walk to a nearby convenience
store is more convenient than driving ten minutes to a supermarket. Pumping gas
into one's car during the commute home is convenient, but having to do the same
on a weekend may not be. What seems convenient here and now may be inconvenient
in different circumstances. Mobile computing has become popular by closing gaps
in different circumstances when a user performs necessary tasks.

It is also important to understand the purpose of an action that makes a new
technology convenient. Pumping gas is not a necessity for people who regularly
commute by train. Being able to order books online is not a convenience for
people in places where bookstores exist right where they catch trains daily (as
is the case in Japan). The point is that pervasive computing will have distinct
forms of adoption depending on how people behave socially. What needs to occur
differs from society to society depending on existing social and cultural
systems, and what "pervasive" stands for may also be quite different.

2.2 Technology is a basic driver of pervasive computing, but people's
behavior is the ultimate determinant, dictating unique factors by country,
culture, and region

Let's compare the business and consumer sides of pervasive computing in
Japan and the United States. Businesses are always in need of effective
communication. Whether interpersonal or intercorporate, the speed, accuracy,
and quality of information exchanged are vital factors of business competency.
Nevertheless, there are different approaches among cultures to achieving this
goal of sharing (or not sharing) information effectively. Management styles
vary. The general tendency of people to distinguish job-related interpersonal
relationships from personal relationships varies. The way people live outside
of work varies. Specifically, the U.S. business management style is more open
to allowing employees to work within a prescribed process, and providing
information resources to let them work effectively within that process. In
contrast, Japanese management tends to require interpersonal decisions to move
processes forward, and often information resources are found within the
boundary of a person who assumes responsibility for the information. In this
context, when it is management's decision to adopt new technology, pervasive
computing will be adopted differently. In the United States, pervasive
computing will give everyone the same standing, but in Japan it may be a means
to easily create more controlled layers or groups of information access.

On the consumer side, convenience stores ("combi's") provide a ubiquitous
retail outlet presence for urban Japanese. Combi's are readily accessible in
both residential and business areas, often located literally just a few steps
out the front door. In contrast, Americans have come to depend on the
automobile or other forms of transportation for access to retail locations --
hence, the greater appeal of "couch potato" e-commerce including delivery in
the United States. The Japanese market does not have a strong demand for
IP-enabled refrigerators monitoring contents when food retail outlets are
immediately accessible.

Differences are illustrated in consumer behavior. Internet use in the United
States has substantially impacted the way people shop, trade stocks, manage
funds, educate, and even participate in politics. Japanese use of the Internet
is more at the level of novel entertainment or advertising. This contrast comes
from different necessities of having computer-enabled information access at
home. Whereas U.S. consumers may look for information about products and
services on the Internet, Japanese consumers often already have it through a
much higher exposure to advertisements, magazines, and papers they read on the
train while commuting, or from ubiquitous billboards visible on most major
streets. For shopping, Japanese retail shops are located within a few steps of
offices, train stations, and homes. In such a society, it makes more sense to
go out and buy what's needed rather than logging on and surfing the net.
Pervasive computing offers ubiquitous access to information without requiring
much user effort. U.S. consumers may welcome this as a radical change in
information access, but Japanese consumers may see it as redundant. The value
of pervasive computing in a society such as Japan, where people closely
communicate and share common means of engaging in social activities, may be in
enhancing interpersonal communication. Sending and receiving messages on
handheld devices will be in great demand, and enabling devices to interface
with others will greatly accelerate pervasive computing.

2.3 Different ways people embrace technology and incorporate it into
daily life

Technologies can change the way people work, live, and commute. Many
first-world citizens are coming to depend on various appliances and devices
such as the telephone, TV, and microwave. For many, it would be difficult to
live without the convenience and services these provide. The future may offer
enhanced wearable devices (not only hearing aids and pagers, but identity
transponders worn on the body that allow self-service checkout at the
cashier-free supermarket by debiting the customer's account), imbedded devices
(a blind person with brain-imbedded visual sensors), and perhaps high-tech
piercing (based on form or function!).

Home appliances already have adopted pervasive computing functions in Japan.
Some appliance manufacturers have introduced microwave ovens that download
cooking recipes from the manufacturer's server. Although not Net-connected,
rice cookers have long been equipped with microchips that control the heating
sequence. Air conditioners also have used sophisticated temperature control
employing "fuzzy" logic. All have the potential to become interactive. This
sophistication in home appliances in Japan may be attributed to the fact that
many families emphasize domestic activities such as cooking, cleaning, and
maintaining housing. It may take comparatively longer for the United States to
adopt appliance computerization because households take less time to engage in
such domestic activities. In financial applications, the use of cash is
preferred by far over credit cards in Japan, and personal checks are virtually
unused. U.S. society has long adopted cashless monetary settlements (i.e.,
credit/debit cards, personal checks), which can be easily converted to the use
of pervasive devices. In this context, adoption of pervasive computing may be
characterized as interpersonal and domestic in Japan, and business oriented and
social in the United States.

2.4 Physical characteristics of devices

The shape and physical characteristics of pervasive devices also vary. The
U.S. lifestyle allows devices to be somewhat larger than in Japan, where they
need to be as small as possible to gain popularity. Americans generally travel
by car; devices therefore are not required to be as light and compact as in
Japan, where a majority of people take public transportation and walk. Also,
Japanese users tend to be attracted by style and physical characteristics even
if the contents and services are limited. A general tendency in the Japanese
consumer market is that the devices themselves (hardware) initially are more
attractive than the contents; the contents provide secondary attraction, and
subsequent growth in contents and services. The Japanese's preference for
portability will provide incentive for manufacturers of handheld pervasive
devices to quickly deliver multifunction devices that are small enough to wear
on the body rather than actually being only handheld.

For embedded technology, such as in automobile and home appliances, the
Japanese often are attracted to more function than they may actually need,
expecting to be able to use services and contents when they become available.
They select products by this criteria when purchasing. This tendency may
explain the rapid introduction of Web-enabled home appliances mentioned
earlier. The U.S. market may be opposite: People tend not to buy equipment
until contents and services are established and available, which calls for a
certain maturity in the industry before device-level competition takes place.
In this context, pervasive computing may present divided models where Japan
leads the equipment and the United States leads the contents, as in the home
audio/video market today.

Although the United States leads with per capita PC usage and penetration,
cell phone usage is higher in parts of Asia and Europe. Cell phones are no
longer limited to voice communications; customers can have wireless access to
banking, travel reservations, and other mostly consumer applications. An
example (circa October 1999) is the Nokia 9000 GSM phone, complete with a
keyboard, screen, and Windows-type interface including browser. In Finland and
Japan, school students use small, portable, inexpensive wireless devices to
send short text messages to each other (inside and outside the classroom!).

DoCoMo, the wireless unit of Nippon Telegraph & Telephone Corp. (Japan's
dominant carrier) has sparked an explosion of Japan's cell phone market, now
one of the world's largest and most sophisticated. DoCoMo grew from a vision
that the future of the mobile business lay not in voice calls but in services
such as Internet access. Japan's mobile phone market now boasts 50 million
subscribers (half of which are DoCoMo customers) versus about 75 million in the
United States, a country with double the population. Demand for mobile services
has exploded, creating a shortage of DoCoMo's wireless spectrum. It plans to
roll out so-called third-generation (3G) cellular technology, which uses
spectrum more efficiently, in early 2001 -- years ahead of the United States
and even ahead of Europe's advanced mobile players.

A current example of an early pervasive service is DoCoMo's "i-Mode," a
precursor to 3G services, which offers access to several thousand Web sites
using WAP so their content fits onto the small screens embedded into i-Mode
phones. Typical popular content includes banking, travel, and weather
information, but as described below, the primary attraction is
transactions in these application areas. The number of i-Mode customers is
now growing by 15,000 new subscribers each day; by March 2000 it will have
about 5 million total subscribers, after starting with none in early 1999.

I-Mode's success is already giving Japan a role in shaping the next wave of
the Internet. Japan was a follower in the current wave: Dominated by Microsoft,
Intel, and U.S. PC makers, it centers on surfing the Web via PCs. The next
wave, pervasive computing, is expected to be dominated by Internet appliances
-- cheap, easy-to-use devices like cell phones and game machines that could
eclipse the PC, as it exists today, as the tool of choice for tapping
e-business services.

DoCoMo's success is giving Japan a head start in developing high-speed
Internet services that are at the heart of 3G, such as video and interactive
games, over mobile phones and other portable devices. The potential of 3G has
spurred Japan's computer and electronics giants, who were humbled in the 1990s
as nimble U.S. companies bested them in the PC market and European makers
dominated the cell phone business outside Japan. Worldwide ambitions ride on
Japan's mobile Internet success; Japanese technology companies are investing
vast sums in the belief that working with DoCoMo will give them a lead over
rivals when 3G rolls out in Europe and the United States in coming years.

As a first step by NTT DoCoMo to expand its i-Mode wireless-phone Internet
service overseas, it will license its technology to Hutchison Telephone Co.,
Ltd. (HTC), Hong Kong's largest wireless service provider. NTT DoCoMo took a 19
percent stake in HTC in late 1999. This deal will allow the same content to be
provided to users of HTC's phones, which use a different wireless communication
standard. NTT DoCoMo is considering expanding the service to the United States
and Europe next.

A testament to investors' confidence in the potential for wireless is that
the value of DoCoMo's stock, which was listed in 1998 on Japan's stock market
in the world's biggest-ever IPO, surpassed that of parent NTT domestic
wireline carrier in late 1999.

Multinational telco equipment manufacturers, including Telefon AB L.M.,
Ericsson, Fujitsu Ltd., NEC Corp., Nokia Corp., and Lucent are working with
DoCoMo, designing 3G handsets, base stations, and services. These companies are
trying to make 3G into a global standard so that the same phone can work
in Tokyo, Paris, or New York. Today the United States has three major
standards, Japan its own unique standard, and Europe and a number of countries
in Asia use the dominant technology, known as GSM.

3.1 I-Mode service adoption, demographics, and usage

In Japan, the majority of i-Mode users are in their twenties. Overall, cell
phone ("Keitai Denwa") users' ages are spread equally from their teens through
their forties, but among users who already have a cell phone, a majority of
those in their thirties and forties don't feel the need to replace their
current phone in order to get i-Mode. In contrast, people in their twenties are
very quick in upgrading to i-Mode, as a fashion statement and expression of
their identity rather than for convenience.

Thus, i-Mode applications can be separated into two categories -- practical,
and fashion/self-identity. For practicality and convenience,
applications include the following:

Banking. Due to the lack widespread use of personal checking in
Japan, this function is extremely useful for paying bills, such as rent, by
invoking direct electronic funds transfer.

Travel. This application is useful for viewing schedules for
commuting and "Bullet" trains (Shinkansen), airplanes, and availability of
hotel rooms; reserving tickets; and making hotel reservations.

Ticketing. This application is useful for checking availability and
making reservation for concerts, movies, and other events.

E-mail. As Japanese commuters spend lots of time on crowded public
transportation where cellular voice usage is discouraged, recently many young
people communicate by sending e-mail using their phone keypad, rather than
talking. Whereas older users find it inconvenient to type messages using a
phone, younger users have mastered it very quickly.

Currently, these are four major practical i-Mode applications, but other
novel uses are growing ,such as a GPs navigation service for pedestrians. For
400 yen per month (U.S.$3.80), i-Mode users can see immediately where they are
walking on a small map that indicates banks, convenience stores, retail
outlets, restaurants, department stores, supermarkets, hotels, hospitals,
schools, and other facilities. Weather reports can also be called up before
deciding whether to grab an umbrella.

For fashion statement and entertainment, applications include the
following:

Chakumero. A melody announces incoming calls: "chaku-mero" is a
shortened word for "chakusin (receiving calls) melody." The music
becomes an identity statement according to which melody is chosen. Convenience
stores sell chakumero books teaching users to input their own unique melody. As
of July 1999, one newspaper's study showed 34.8 percent of respondents using a
chakumero melody instead of a generic incoming ringing. Although one would
expect users in their twenties would have the highest rate of chakumero usage,
research indicates that the most frequent chakumero users (47.6 percent) are in
their forties, followed by twenty-somethings at 35.9 percent. Initially, the
chakumero function played only one note at a time, but now four notes can be
played concurrently, like playing a keyboard, covering three octaves with major
and minor adjustments.

Music download. Users can download and listen to the latest hits
chart, instead of going to the CD shop.

Animated characters. For 100 yen per month for a character like
Hello Kitty, users can receive a different visual of the selected character
every day to be used as a screen saver (machiuke gamen).

Greeting cards. Users can send color e-mail greeting cards to up to
five people concurrently with a color visual, such as a cup of sake and the
message "Do you want to go for a drink after work tonight?"

Horoscope. This content has been very popular for years, predating
i-Mode, particularly among young women. Tokyo Department Store sends mail to
i-Mode users linking horoscope information to special sales.

One additional fashion statement is not limited to i-Mode; many users choose
a hand strap or handle for their kite cell phones primarily for aesthetic
reasons. Form over function may rule in some parts of pervasive computing!

Pervasive computing in an increasingly networked world continues to affect
more and more of the world's population. More questions than answers remain,
more investment required than profit currently available, but plenty of
opportunity and revolutionary benefits (and potential pitfalls) for everyone
who participates. Although this is a global phenomenon, regional and national
social and cultural factors will directly influence the technologies and
promise of pervasive computing.

Appliances to Be Linked to Internet, by Jura Koncius and Maryann
Haggerty, Washington Post, January 18, 2000 ; A1

State of the Art: Look Out! New Wrist Devices on the Loose, by Peter
H. Lewis, The New York Times, January 20, 2000, Section G; Page 1

Even so, the 1999 market for Business to Consumer (B to C) electronic
commerce in Japan was 248 billion yen (US$2.36 B), or roughly four times the
64.5 billion yen of 1998, according to a survey from the Electronic Commerce
Promotion Council of Japan and Andersen Consulting covering 263 companies
running Web sites for electronic commerce. In addition, if the newly added
segment of real estate is included, the size of Japan's electronic commerce
market reached 336 billion yen. ($3.2 B) -- Japan Economic Newswire, January
19, 2000